Fair trade is once again a rallying cry for many Americans. Many contemporary leftists believe that the U.S. government should impose restrictions or tariffs on imported goods that are alleged to have been produced by underpaid or oppressed Third World workers. Few contemporary protectionists are aware of the sordid history of trade conflicts earlier in American history.

Restrictive trade policies were a major cause of the American Revolution. “In 1732, England slapped heavy duties on American pig iron, and, in a death blow to the hat industry, decreed that hat makers were forbidden to have more than two apprentices each,” as an 1892 Stanford University monograph noted. In 1750 Britain prohibited Americans from erecting any mill for rolling or slitting iron; William Pitt exclaimed, “It is forbidden to make even a nail for a horseshoe.” The Declaration of Independence denounced King George for “cutting off our trade with all parts of the world.” Many Founding Fathers recognized the corrupt nature of such restrictions. Benjamin Franklin observed, “Most of the statutes or acts, edicts, arrests, and placarts of parliaments, princes, and states, for regulating, directing, or restraining trade, have been either political blunders, or jobs obtained by artful men for private advantage, under pretense of public good.”

Tariffs and Embargoes in the New United States

The first Congress under the Constitution passed a new tariff in 1789 with an ad valorem rate of 8 percent; the entire tariff code consisted of a single sheet of rates posted at U.S. custom houses. (By the 1980s, the tariff code would fill two hefty volumes with more than 8,000 different categories.) While the 1789 tariff seemed high to many Americans at the time, the tariff levels would continue rising and reach triple that level by 1816.

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